Question-4 A Company purchased for $5,200,000 a mine estimated to contain 2 million tons of ore. The company paid $300,000 development costs before it can do any mining. After it has removed all the mineral resources, the company will required to restore the land for an alternative use. It is estimated that the fair value for this restoration obligation is $120,000. When the ore is completely extracted, it was expected that the land would be worth $370,000. A building and equipment costing $2,800,000 were constructed on the mine site, and they will be completely used up and have no residual value when the ore is exhausted. During the first year, 750,000 tons of ore were mined, 500,000 tons of ore were sold. $450,000 was paid for labor and other operating costs in the first year. The company used the units of production method for depletion and depreciation. Instructions 1- Determine the amount of the depletion base 2- Compute the depletion cost per ton of ore 3- Compute the total cost per ton of ore mined in the first year. 4- What amount of depletion cost should be charged for the cost of goods sold in the first year